a day of revelations by a former cia director, who is now apparently seeking redemption. america's former top spy, david petraeus testified about that terrorist attacks in benghazi and several of the cia and its director in all of it. petraeus contradicted the white house version of why it took them so long to acknowledge the evidence of terrorism, why there were still talking about an anti muslim video when they knew very well that they had attacked and killed four americans.

house intelligence committee member congressman peter king told fox news meghan kelly that petraeus acknowledged the cia knew it does he was an act of terror from the very beginning and that the talking points provided to ambassador rice were edited by someone after the cia had delivered their assessment to the white house. reis went on five sunday morning talk shows and falsely told america that benghazi was a spontaneous attack in response to the internet video. >> the talkg points that came from the cia specifically mentioned al qaeda and that al qaeda was involved in the attack. they left the cia and went through a whole process which i believe included the whie house , nd when the talking points were finalized, all references to al qaeda were taken and it was put in as an afterthought, saying there were indications of exremist involvement in the demonstration lou: president obama himself has

been repeatedly that he considered the siege of the council and benghazi in active terrorism since the day after it happened. so how in the world would he or his united nations ambassador to make this statement on national television five days after the incidents? >> the best assessment is that in fact this was not a preplanned, premeditated attack. what happened initially was it was a spontaneous reaction to what had just transpired in cairo. as a consequence of the video. lou: ambassador rice made nearly identical false statements to four other networks the very same morning. three days later on the 19th of september the national counter-terrorism center director, matthew olson, told the senate homeland committee the attack on our diplomatic post in benghazi last week that took the lives of four americans

including ambassador stevens is proof that acts of terror and violence continued to threaten our citizens and interests around the world. why would president obama go in front of the united nations general assembly the following tuesday, september 205th and then blame the benghazi incident on the youtube video yet again if he already knew the incident had been incited by an offshoot of al qaeda in libya. >> the speech that justifies mindless violence. [applause] there are no words that excuse the killing of incidence. no video that justifies an tack on an embassy. lou: why didn't anyone on the president's national security council or in the intelligence community question the statements that they all knew to be false.

meanwhile, democrats on the house intelligence committee are today still trying to spend what has become bundantly clear as a false characterization by the white house. >> nobody has ever denied it was a terrorist attack. what we question is how far. it appears now even intelligence that this was someone spontaneous. but the terrorist attack and spontaneous. why that has to be mutually solicit is completely beyond m. lou: congressman adam smith's with a new take on the spin. we will take up the implications of tday's revelations with a number of experts and insiders. former cia covert operatives. the louis gomer, and to leading doctors here to psychoanalyzed it all. in washington that is a lot. our first guest has a deep understanding of the way the intelligence community works.

joining us now, former cia operative, the highly decorated operative who served 23 years in a clandestine service. he worked as chief of station in the middle east and latin america -- let america. the first question has to be, the former cia director sing that he does not know what happened after the cia send over their memorandum. that isn't the one he delivered, and the changes had to be made subsequently. the cia director, by the way, you anticipated when you were on this broadcast a few years ago saying that it had to have originated in -- the changes, the flow from the white house to the united nations ambassador had to occur either in the state department of the white house itself >> i stand by that. and the fact is that no one writes those sorts of things

that a cia officer wouldright to my director would write other them at the white house or at stake. remember something. the u.n. ambassador, our ambassador to the united nations is a member of the cabinet also. this has been lost a lot of folks. she is a cabinet membernd would be taking instructions directly from the white house and probably not the secretary of state. lou: president obama and acknowledging exactly that. the white house request. petraeus testimony creates a number of troubling questions. one, he knew immediately that he was a terrorist attack. just a few days later on the 14th of september before the intelligence committee. frankly, at least the statements and most members of that committee to examine with the

white house line on an internet video, which the president himself has pointed to, disavowing that very mesage, that very talking point from the first 24 hours. >> clearly he has amended his statement. the first statement, you know, said that he purprtedly, written and sent from cia out al qaeda was suspected. the words were changed to extremists suspected or indications of extremists. lou: he amended his statement. who is the heat? >> patraeus appears to -- the seventh from petraeus appears to be amended. what he did stay based on the news reporting is that the statement that was sent out, the riding said kati suspected. the change was indications of extremists. this goes to a larger narrative

that there was not a terrorist attack, and if you listen for the president's words of the united nations hetalks about a mindless attack. mindless activities. well, no. it was not mindless. it was preplanned. here's the president trying to make the point that it was not of planned terrorist act. something about the way the president is approaching this and all his supporters have got behind in to try to sell this narrative to the united states. it just wasn't true. lou: top house armed services democrat and embrace -- adam smith, rather, as we just sa talking about the statements by ambassador rice saying he does not understand how a terrorist attack can be both spontaneous and preplanned. it's just bizarre what is going on here. the 80 logical, if you will, mandated logic of all is appalling .

>> democratic contortionists trying to support the president. lou: it may be as straightforward. we also have come -- some contortionists on capitol hill who have yet to express a complete outrage t what was a completely different statement by a man who is engaging in some contortion of his own, david petraeus he testified on the 14th of september. there wa a terrorist attack, not a sponneous reaction to the internet video who is now apparently not discussing why he thinks of this change of for the past week and a half. i have to ask you, nothing happened with what h been of very long investigation apparently into petraeus on the part of the justice department which is a politicized justice department. i mean that as an understatement

. nothing happened on he -- until he insisted on putting up the time lie. then suddenly in his oral all hell broke loose. do you think that's a coincidence? >> i don't think there are any coincidences' in any of this. you know, if you look at all of the time lines in terms of what is clearly cover up, when you have to ask this my questions, push this hard, when they will keep a straight answer, when the words meant of this, i mean, it's clear they're not telling the truth. they're trying to conceal and protect the president. i'm sure at some point given the testimony today and yesterday they will find some midlevel staffer that the combined gasol on down at the nsc. lou: thank you fo being here. much more on the implications the "a-team" in moments. fiscal cliff? what fiscal cliff.@

>> our challenge is to make sure that we are able to cooperate together, ork together, find some common ground, make some tough compromises, built come -- build some consensus to do the people's business. lou: did they figureut a way to steer away from that cliff? congressman los gummer joins us next. rising tension. israeli troops are massing has accomplished on the gaza border escalates. the laest details and just moments. [ malannouncer ] it'that time of year again.

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♪ lou: disco cliff negotiations under way at the white house today. a solution to our economic problems easier than people believe. talking with us here tonight about those discussions and also his call for a special prosecutor in to benghazi. later, the latest from israel as

rocket attacks continued on both sides of the gaza border. a complete update on the rising tensions. in a moneyline tonight, stocks ending the week on a positive note. posting thebiggest gains today since election day on optimism that our leaders in wasington will reach a deal to avoid a fiscal clef. the dow jones industrial rick breaking a four y losing streak. s&p up six and a half. nasdaq bros -- rose 16. the s&p down one and half percent. the nasdaq six week losing streak, the longest in almost four and a half years. four and a half years. and economic news, hurricane sandy took a toll on industrial production. it fell fortunes of a percent. economists expecting a two tenths of a percent increase. thyield on a ten year treasury note moving down. crude-oil prices down selling at

$86.67 per barrel. and in corporate news, tough losing more than 7% in its share price after reporting late yesterday, quarterly earnings fell by nearly 50%. good news for facebook. that stock up more than 6%. the social network share is holding up despite the expiration of some like the agreement this week. two il workers are missing after an oil platform exploded off the coast of louisiana today eleven other crew members were flown to hospitals, four of them listed in critical condition. coast guard ships and helicopters are continuing their search tonight for the two people who are missing. no crew of is leaking from the platform owned by black elk energy, which is about 25 miles southeast of grand isle, louisiana. turning back to politics, and joining us now, the "a-team" tonight demopolis a prize-winning columnist, fox is contributor, former clinton

adviser, fox is political analyst, republican strategist, fox is political analyst. let's start, if i may, with you, michael. david petraeus, two meetings before the house and the senate intelligence committees. all closed door, but we are told he went in and contradicted just about everything the white house and said. >> you know, i think, lou, the before today there were two possible explanations for what -- for the white house failing to immediately recognize it is terrorism. one was incompetence and one was far worse. based on the testimony today, we can say that the answer was it was far worse. it was dishonesty, intentional, a concocted story about a demonstration that never exist simply to mislead the public about what actually happened. lou: is there a complication here though in that david petraeus and congressman peter king on the intelligence

committee as well as the chair of the homeland security committee says that his, petraeus remarks about his testimony on the 14th of september are not the way he recalled that testimony. your thoughts? >> and i trust peter king. he's a great leader, and i'd like david petraeus, but clearly weeks before september 11th, and the democratic convention said that al qaeda was on i its heels. basically destroyed. so the white house lied. they took al qaeda out of the talking points so that obama could win the election. so it wld not be a political issue so the president, again, the politics of for country. lou: it's pretty clear that mitt romney made a tremendous mistake in not taking the initiative on benghazi, despitell that occurred in the debate.

he had every opportunity in the third debate to drive that issue for work and did not. >> he absolutely did. my colleague and i made tht same point beforethe election. we sid, if he did not do it he would not be president. he didn't do it. he is a president. you can't bear to be cautious in politics, especially in the most especially when you have the facts in your sde. lou: a lot of the folks said that this docile lap dg liberal national media would only have taken up the issue had governor romney done so. and, of course, that's history. no sense mopping yarborough's with it here tonight to but the fact is there is some much there that the national media has not gone after that the republican party has not gone after. this white house has refused to be straightforward. obviously running of the clock is the expression.

>> rig. lou: and one of the few things that is transpare about this. >> look. even with the prescorps this week with the president on this, there was no attempt to really get to the bottom of this. the closest question was something along the lines of do you think you should have known before the election that, you know, about petraeus? well, that presumes the white house line which is that he did not know. the things the president chose not to know before the election is mind-boggling. and so they kept it from the public because it was convenient >> and another travesty here, you have these female members of congress that are calling the fact that we are going after the un ambassador because she is a woman of color, and where is the air raids that we have for americans that have been murdered? get there saying that even light burns said the reason why we're going after the u.n. ambassador,

that she went on the air is because is a woman of color. that's ludicrous. lou: you know, it's really worse than ludicrous. there is the insult, of course, in the suggestion that those folks think that it will work as a tactic rather than air response substantively to the issues that are grave, indeed, and critically important to the natioo. certainly principal among supposed to be the familiis of those four americans were murdered. we will be back with the "a-team" here in just moments. u.n. ambassador says a rise of the center of the administration what will we call this? and evolving story on benghazi. does she have a pryer of becoming secretary of stte? these folks will answer that qution and so many others. stay with us.

♪ lou: we are going right back to the "a-team" river will start with the question of whether or not this president will go ahead with the nomination of susan rice, given all the revelations by david petraeus today before the senate and house. first want to bring you up-to-date on what is happening in the middle east and israel appears closer to a possible ground operation in gaza. the israelis have ordered up another 45,000 reservists. they are on standby now, and that is an additional 75,000 total reserv that are now massing on the border with gaza. the israelis are vowing to intensify there air strikes on the gaza strip, that after palestinian -- palestinian -- palestinian militants targeted tel aviv. , says no fired more than 450 rockets at israel over the past three days.

at least 23 palestinians have been reported killed in the fighting along with three israelis. the violence straining israeli relations with egypt. the senate's prime minister, not its promise to the president, prime minister to gaza to show solidarity with the palestinians and to, some say, a broker truce. moments ago men yahoo called president obama to discuss options for the escalating the crisis. that is the latest there. let's return to he "a-team". i had just pose the question, will this president move ahead with the nominationof ambassador rice to be secrety of state? >> senator mccain, others would know how to fight it fighting and filibuster. i think as president, we ought to stop fighting americans

and working with other americans and fight the world pbgc was going on in the mideast. the enormous problems we have. the president he's fighting other americans. i think that is a huge mistake in why the country is so polarized. lou: go ahead. >> of the liberal mainstream and also liberal members of congress, they are already laying down the ramework for the president to nominate her command they're going to bring female members of congress, the blaccaucus, the hispanic caucus to say if they do not confirm her time of republicans fight her, if they try to filibuster, filibuster her their right to make it into a race issue again. lou: race, class warfare, we would have all of the ingredients necessary for a continuation of the tension that has existed between the republicans, conservatives, and this president an the democratic party in the liberals it is ot, however, one-sided.

republicans have been very antagonistic toward this president and his agenda and fighting hard to match and appropriately so, fighting hard against what they do not believe in and reject, a left-wing shift in the country. but this is an interesting point. because david petraeus has contradicted everything that the white house build its, if you will, narrative, its benghazi narrative on. his, this internet video, which is one of the most bizarre things i've ever heard, has been utterly discredited with it ambassador rice, the president and his administration, state department including secretary of state hillary clinton. i would like to get your opinion first, each of you. i would like to understand whether or not you believe this president is, perhaps, wounded here more than he realizes and would be playing a very foolish came to double down on the

ambassador rice, playing a very foolish game to project a hardened image and position on e fiscal cliff as well. >> i agree that he took the wrong course yesterday. i was discouraged from the point of view of the bipartisanship that michael spoke to and i believe is important. bottom line, doubling down on ambassador rise, i think is the wrg course of action. he should have said let's let the chips fall where they may find out whatreally happened. on the fiscal cliff i thought he was unduly hostile. think there is the basis for a deal, and to be so harsh and difficult as i think just plain wrong. lou: he sounded a little btter today, angela. >> he did. and here in washington, i think they're really going to work out a deal. but republicans are going to have to ve a little bit. steve forbes said we should just fall off the fiscal cliff and let the cards fall where they may and let this president take

the blame for , but i do believe, you guys, they're going to work a deal as for benghazi and susan rice, i think that this is worse than watergate. if the president does double down it will backfire on him. lou: the last word. >> the only has so much political capital to spend. he spends it all once is a rise, which i think is a fool's errand because we don't know where this is going. we do know that their have to be other hearings. it could not end today please today was a very bad day for him on this. lou: as we watch all this one can begin to understand his rror in senate. he, david axelrod, his reelection campaign, his administration, they have successfully fended off an inquiry from the republicans, the national media, won reelection, and they look like they are one heck of a lot smarter than the republicans. thank you very much. appreciated. good to see you.

lou: that petraeus sex scandal. without it would we have never learned more about a dozen? and paul was going to the mind of our nation's top spy . here to a psychoanalyze the pair. richard trumka does not have much to say about the union that brought down hostess. instead, he figured oua way to blame governor romney for the demise of the company and the 18,000 jobs. happy birthday, speaker? thpresident gave him his gifts, but was it a secret plot to eliminate the competition? what may be a white house diabolical plan, e are just kidding. the white house would not do that. that. straight 4g lte is the fastest. so, which supeast 4g lte service would yochoose, based on this chart ?

don't rush into it, i'm not looking for the fastest answer. obviously verizon. okay, i have a different chart. going that way, does that make a difference ? look at verizon. it's so much more than the other ones. so what if we just changed the format altogether ? isn't that the exact same thing ? it's pretty clear. still sticking with verizon. verizon. more 4g lte coverage

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lou: following a meeting with the president and the congressional leaders, the house speaker says the group outlined what he called a framework for compromise on the fiscal clef. republicans apparently willing to put revenue on the table if accompanied by opprobrious spending cuts. joining us now, congressman leach, r from texas just reelected to a fifth term, vice chair of the house subcommittee on crime,terrorism, homeland security and served previously as chief justice for the teas 12 court of appeals. great to have you with us. >> always good to be with you. lou: let's start with the fiscal cliff. your call for a special prosecutor on benghazi. going to the fiscal cliff, the speaker making it very clear that he is going to enforce his negotiation with the white house. very positively with some sense, at least, of accommodatio potential accommodation if his terms are met. that is pretty positive stuff.

>> wel it is positive, but they're is a lot of pressure right now. of course pressure is what you can use to take carbon and make diamonds. this is the time to be bold. this is not the time to be defensive. i am glad the speaker has come forward with the proposal, but the thing is we ought to be taking the president's words and icking them back. he wants everybody to pay their fair share, let's do it. let's have capital gains, 15%. let's have income tax 5%. give tax, 15%. let's make suretht warren buffett finally starts paying at least as much as a secretary in the percentage. what has been proposed here by the president will not have warren buffett paying the same as his secretary in percentage. a flat tax, lou. let's take the president at his wo. if you make more, you'll pay more, and this is the only way

that's going to happen. lou: i believe that the speaker, perhaps the president himself may have been talking to you, talking to steve forbes and others when it talked about the possibility of reforming the entire tax code. >> this is a great time. lou: well -- >> and not only that, let' not forget the last time the senate and the budget it was when harry reid wored with his friend, speaker pelosi, and nobody in the 2008 budget complained that it was a spending enough money. let's go back to 2008, two and a half trillion. that cuts off a trillion in spending right there. lou: well, there are all sorts of ways to get there, as you suggest. it has been suggested in other forms as well. but the idea that this president and the speaker are coming together to have at least a civil discourse over what in the

world we're going to do about this fiscal cliff six weeks remain, are you any more hopeful as a result of the tunnel had taken on this for state? >> well, i was a helpful with the president's tone when he said that -- %-are you being partisan? >> i'm not being partisan. i'm being objective when i say that the president proposed over one half trillion in new revenue. he wants to destroy the economy. come on. yoin their right mind is going to allow that kind of increase to just devastate the economy? it will be just hostess going into business. lou: that's a good point. it's interesting, no one down there is talking about the fact that individual tax payments, a taxpayer payments, the internal revenue service, receipts from the taxpayers are risen 26% of the bush tax cuts of the past two years, which tells us that

the answer here is growth. t i'm a simple follow. i just want to see everybody talk to each other. let me turn to benghazi, the area of the special prosecutor. there is a sense of helplessness that is probable in wasngton d.c. right now. i don't believe that congress feels that it has the strength or the tools to actually penetrate the veil of denial and secrecy and opaque miss that is this administration when it comes to what it is done within just the last nine weeks. you're calling for a special prosecutor, and the fellow who has to do that works for the president of the united sates. >> the attorney-general. that's right. the attorney general has to do it. lou: can you really see eric holder sang, you know what, congressman, i think you have a splendid idea. what we're going to do is investigate ourselves. >> well, if he doesn't appoint a

special prosecutor to my someone to do an independent investigation, then what you have is the very people who have floated the idea of prosecuti general petraeus for adultery in the military, there are all kinds of things that have been floated th they might do to him. all kinds of pressure that can be brought to bear. lou: are you saying that you don't think, speaking earlier with former cia operative, you don't think it's a coincidnce that all this hell started raining down on david petraeus as soon as he issued against the wishes of the administration, a cia timeline on in gauzy. >> that is exactly, and i love your sarcasm. it's one of the reasons i love you. that is exactly the problem. and the way tha we do have the tools is, number one, we have the purse strings. if it becomes a part of injustice we have the power to

be funded. when it is clearly being used to exact and justice, is time to defund the parts of it that are being unjust. we have that power. the other thing that is so great about america, when the american people rise up and say, this is crazy, people were crying for help and nobody did anything. you know, hillary commercial about who you one answering the phone at 3:00 a.m., the answer we find out is, for heaven sakes, somebody. nobody did. the president goes to bed. people are being tortured and terrorizednd killed. he goes to bed. who was acting president pro tem? we need to know. i tell you what, we're going to find out that the protocol requires that when an ambassador becomes underttack he has to know within ten minutes. who was notified? president pro tem jerry? we need to know, and as attorney general is not going to do it.

the american people need to rise up and make it clear, we need an independent investigation. lou: as always, good talking with you. thanks for being here. >> always good. lou: coming up monday, the entire -- retired pacific fleet commander admiral james lyons was some theories about the possibilities of what happen and why and benghazi. you will want to hear them. and the joy at of hate, author, the five co-host, and redeye host of right. that's right. two shows a day. he's among our guest. stay with us. the dollar's doctors psychoanalyze washington d.c. and in particular david petraeus and his, the next.

ally bank. why they have a raise your rate cd. tonight our guest, thomas sargent. nobel laureate inconomics, and one of the most cited economists in the world. professor sargent, can you tell me what cd rates will be in two years? no. if he can't, no one can. that's why ally has a raise your rate cd. ally bank. your money needs an ally.

♪ lou: some republin governors folding life cheaper one shares on tax hikes for the wealthy. the governor of virginia, former

mississippi governor, iowa governor all suggesti republican party should be open, open to interest-rate hikes in exchange for a major, major democratic concessions. i love it when the governor start doing the negotiating. the maker of twinkies, hostess brand said is going at a business because of union workers cripple the compny. as fail cio president --8i -- what is happening with hostess brands is a microcosm of what is wrong with america. as maine style wall street vultures made themselves rich by making american poor. you have to admire. this may be news, but the election is over. maybe he should back up on the painting and handed it to the point. e ldout union ended hostess and the jobs of 18,500 workers.

president obama opening this fiscal cliff talks with a birthday wish for house speaker. >> my understanding is tomorrow is the speaker's birthday. for those of you who want to wish him a happy birthday, we are not going to embarrass him with a cake because we did not know how many candles were needed. >> yeah, right. >> we do want to wish hima happy birthday. lou: was that kin of a grudging wish? come on. anyway, good for him pushing the speaker a happy birthday. happy birtday. but instead of a cake the president caved and a vintage italian wine. this bottle retails fo $1,205, and therein lies the rub, the problem, the gift could be violating house ethics rules which farmers of congress from receiving gifts worth more than $50. some were suggesting that it is a plot. we will see.

up next, america' top spy done enough to get caught cheating on his life. leading psycologist, dr. jeffrey guard derek take us inside the mind of the powerful and dug a month d next. [ malannouncer ] it'that time of year again. time for cii price rewind. because your daughter really wants that pink castle thing. and you really don't want to pay more than you have to. only citi price rewind automatically searches for the lowest price. and it finds one, you get refunded the difference. just use your citi card and register your purchase online. have a super sparkly day! ok. [ male announcer ] now all you need is a magic carriage. citi price rewind. buy now. save later.

♪ lou: i have been justwaiting and waiting to talk with my next two guests. joining me now the psychoanalyze david petraeus, some of our nation's leaders and some of the liaison's. you can explain all of this to me so that it makes great sense. how does a man with a 37 year

career as a four-star general in the united states army, distinguished, respected, hal in the world does he take the cia job to think suddenly that he is not going to be survled? is not going to have the good guys, bad guys, and everything in between watching every step makes? >> he was thinking with the wrong head, right? you know, i think when people engage -- lou: i'm glad you said that. >> i figured i could get away with it. people who know him well really loved him and felt that he was experiencing a void. we were talking about health and is vy exciting life. he was in afghanistan. then it moved year. perhaps he felt like he was missing that excitement. lou: he's the head of the cia. >> still. everything can get boring. then he has this woman ho -- lou: did not find boring. >> not boring in very seductive and complementary to. >> and very fit. a lot of the same values.

>> admired him. and let me tell you, that is very hard to pass up. i think she was very deliberate. you hear people talk about david petraeus, a very gogeous reporter sa he was never flagitious. he was alwayshonest and a stand-up guy. so i think there was something unique to this situation that led to his call them. lou: was cut to the psychology of thi woman. a lieutenant colonel in the reserves. top-secret clearances. she is literally writing a book that she has never written a book before. she has suddenly contract to write it. she goes to afghanistan to talk to the general. this woman is an animated, energetic, driven stalker, at least on the surface of it and by all appearances. is there any possibility psychologically that is what she is all about? >> i don't know if she is a stalker, but certainly she is a type a personality.

she knows what she wants. she goes f i. she's well-educated. very, very bright. and a lot of people said, how can you do that? how can you become a biograph without having that kind of experience and working with general petraeus? she's a married woman with children. lou: a graduate of west int, we should pot out, studying at harvard. >> in tiptop shape, or to my car body. this is the thing. going after a man who she saw as a father figure and a lover. he could not turn down the fact that he had this beautiful young women who complemented -- lou: t thin it might just a boil the mom and she said as he was a father figure? ♪ [ engine revs ] ♪ ♪

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>> speech here we are back. okay, so he has responsibility, general petraeus committee as a white that build his career. he is in charge of fighting two wars at one point. where is the condemnation in the society? it is a demand presided over an 11 year long war. basically, counterinsurgency, and people are saying, you know,

it's a private matter. it's not. it's a very public manner. >> i don't think this is something that happens overnight. see to it specifically about him. >> we are desensitized. we are used to hollywood men cheating all the time. >> this idea that there is a sophistication. >> people are stimulated sexually all the time, and they don't always do this. >> people get to these positions, they slowly got there. these are risktakers. lou: said doctor gardere believes the longer you've been on the job it's kay. we are going to be out of time in about 20 seconds. >> you buy the hype. >> i